Breaking

Walter Energy Plans to Close 2 Coal Mines to Cut Costs

March 22 (Bloomberg) -- Walter Energy Inc., a producer of
metallurgical coal that’s declined 52 percent in the last year,
plans to close an Alabama mine earlier than expected and end
operations at a British Columbia mine as it looks to cut costs.

The company will record a one-time expense related to
closing its North River mine, Birmingham, Alabama-based Walter
said today in a filing. Walter said in February that the North
River mine’s resources would be depleted in 2014. Willow Creek
in Canada will close in the next several weeks and Walter will
take a $7.5 million charge, it said.

“Given the slow recovery in metallurgical coal pricing,
the company is currently evaluating its operations with respect
to cost-reduction initiatives,” Walter said.

Walter rose 3.5 percent to $29.45 at the close in New York.
The shares have dropped in the last year as the price of the
steelmaking ingredient tumbled amid slower growth in China, the
largest producer of the metal, and declining output in Europe.

“The idling reflects the slow recovery of global coking
coal markets,” Daniel Scott, a New York-based analyst at Cowen
Securities LLC, said in a note today. “We view the announcement
as a slight positive.”

Full-year metallurgical coal output will be in line with
last year’s level, it said. The company sold 10.4 million metric
tons of metallurgical coal in 2012, the company said in
February.

Walter also said that British Columbia’s Environmental
Crown Counsel is seeking a C$100,000 ($98,000) penalty for
alleged violations associated with the release of sediment and
debris into Willow Creek from the nearby mine in 2011. Walter
said it intends to negotiate a settlement with the authorities.